Learn to Save Money

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The Book of Proverbs has many great financial principles. The second financial principle we want to look at in our series is ‘learning to save money’. A lack of savings is the number one reason people go into debt. They see something they want, they don’t have the money to pay for it, so they buy it on credit.

Understand God’s Ownership (Psalms 24:1)
Learn to Save Money (Proverbs 21:20)
You Must Live on Less Than You Make (I Timothy 6:7-8)
There is Life After Debt (Proverbs 22:7)
Establish an “On-Purpose” Cash Flow Plan (Luke 14:28-30)
Prioritize Your Plan Around the Four Walls (I Timothy 5:8)
Giving is the Goal to Financial Freedom (II Corinthians 9:7)

How much are we saving?

In 2005, according to the Bureau of Economic Analysis the personal savings rate in the U.S was 0.5%. That means that as Americans we spent 99.5% of every penny we made. In 2006, things got worse as the savings rate fell to 0.4%. There is good news however, according to government calculations, the savings rate for the last quarter of 2008 was 2.9%, which was up from 1.3% from the previous quarter.

“There is desirable treasure, And oil in the dwelling of the wise, But a foolish man squanders it.” Proverbs 21:20

Are you wise or foolish?

If we use this verse from the book of Proverbs and apply it to the typical family we could come to no other conclusion than we are foolish. The other negative impact on families that don’t save is the lessons that our children learn. Unless we as parents are teaching our children how to save and manage money, we are setting them up to continue in the debt trap as they step out on their own. Right now if you were to ask the freshman class at any college in the U.S. how they are paying for their degree, the overwhelming majority would say they will graduate with guaranteed student loans, but no guarantee of a job. I can’t see anything desirable about that.

How do we teach people to save? Most people would like to save, but they just don’t seem to have any money left at the end of the month. What can they do? Tomorrow we will look at the key to saving.